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Call Updates

Biogen Idec - BIIB - close: 47.27 change: +0.53 stop: 43.95

Biotech stocks posted another gain with the BTK index up 1.3% and closing near five-year highs. BIIB followed higher with its own 1.1% gain but closed off its best levels of the session. A bounce from the $47 level could be used as a new bullish entry point. Our target is the $49.85-50.00 range.

Picked on December 27 at $ 46.11
Change since picked: + 1.16
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Cytec Ind. - CYT - close: 48.65 chg: +0.25 stop: 45.95

CYT continues inching higher and is poised to breakout past its August highs near $49 soon. We do not see any change from our previous updates. Keep in mind that our target is only the $49.85-50.00 range. More aggressive traders may want to aim higher. The P&F chart points to a $65 target. The biggest challenge to initiating new positions now is the time frame. We do not want to hold positions over the Jan. 19th earnings report (which is currently an unconfirmed date).

Picked on December 22 at $ 47.01
Change since picked: + 1.64
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 333 thousand

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Foster Wheeler - FWLT - close: 37.10 chg: +0.83 stop: 35.49

FWLT rebounded from the bottom edge of its trading range with volume coming in well above the daily average, which is bullish. We remain on the sidelines. Our trigger to buy calls is at $38.05. If triggered we'll target a run into the $42.00-42.50 range. Currently the P&F chart is very bullish with a $73 target.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/15/06 (unconfirmed)
Average Daily Volume = 598 thousand

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Gilead Sciences - GILD - close: 55.45 chg: +0.75 stop: 49.99

The two-day bounce in GILD has improved the technical picture for GILD. The stock now looks poised to breakout over resistance near $56. Volume today came in decent again for the second day in a row. The P&F chart points to a $66 target. Our target is the $59.00-60.00 range. We do not want to hold over GILD's mid January earnings report.

Picked on December 22 at $ 54.51
Change since picked: + 0.94
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 4.3 million

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Ipsco Inc. - IPS - close: 86.35 change: +0.65 stop: 79.99

IPS set another new all-time high today. We do not see any change from our previous update. If you don't want to chase it look for a potential dip back toward the $85 level. Our target is the $89.00-90.00 range. We do not want to hold over the January earnings report.

Picked on December 30 at $ 83.55
Change since picked: + 2.80
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 396 thousand

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Mohawk Ind. - MHK - close: 90.14 change: +0.54 stop: 85.90

We have been triggered in MHK. The stock spiked higher near the opening bell to $90.50. Our trigger to buy calls was at $90.25, over round-number resistance at $90.00. Today's move confirms yesterday's breakout and marks a move above the $86-90 trading range. Now that the play is open we are targeting a rally into the $94.85-95.00 range. by its early February earnings report.

Picked on January 04 at $ 90.25
Change since picked: - 0.11
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 355 thousand

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Petrochina Co - PTR - close: 85.05 change: +1.55 stop: 79.99

PTR confirmed yesterday's trading-range breakout with another strong gain today, up 1.85%. Today's gain also puts PTR above its late September peak and potential round-number resistance at $85.00. If you don't want to chase it here there is a chance shares will pull back and retest the $83.00-84.00 range before moving higher. Our end of February target is the $89.50-90.00 range.

Picked on January 03 at $ 83.50
Change since picked: + 1.55
Earnings Date 03/00/06 (unconfirmed)
Average Daily Volume = 488 thousand

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United States Steel - X - close: 49.84 chg: +0.40 stop: 44.99

Shares of X continue to climb even though the current bounce is getting a little long in the tooth. It may be time for a pull back. The 10-dma near 47.75 should offer some support. On the positive side the MACD indicator is nearing a new buy signal. Our late January target is the $52.00-52.50 range. The Point & Figure chart for X points to an $86 target. We do not want to hold over the January earnings report.

Picked on December 23 at $ 47.05
Change since picked: + 2.79
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 3.8 million
 

Put Updates

Netease.com - NTES - close: 58.10 chg: +1.52 stop: 58.01

NTES continued to bounce today and shares remain inside its $56-59 trading range. We are still on the sidelines. Our trigger to buy puts is at $54.95. If triggered we'll target a decline into the $50.25-50.00 range. We do not want to hold positions over the February earnings report.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/21/06 (unconfirmed)
Average Daily Volume = 4.2 million

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Progressive Corp - PGR - cls: 116.03 chg: +0.51 stop: 120.05

The bullish market action today has put the brakes on PGR's decline. Volume came in pretty strong for the range-bound session today. Watch for a bounce back to the 10-dma near $119, which is short-term overhead resistance. We do not see any change from our weekend update. Our target is the $110.50-110.00 range but we only have 16 days if the current earnings date is correct. We do not want to hold over the earnings report.

Picked on December 30 at $117.45
Change since picked: - 1.42
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 836 thousand

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Scotts Miracle grow - SMG - cls: 46.61 change: -0.02 stop: 47.55

Wow! We are really surprised that SMG did not show more strength today. The stock failed to breakout over the $47 level and it just might turn lower. We are not suggesting new plays at this time. A failed rally here or under $47.00 would be welcome news. We would wait for a decline back under $46.00 and maybe lower (if you're more conservative) before considering new bearish positions.

Picked on January 01 at $ 45.24
Change since picked: + 1.37
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 354 thousand

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Stryker Corp. - SYK - close: 45.37 chg: +0.77 stop: 46.51

We expected a bounce today and that's what SYK delivered with a 1.7% rebound that stopped under its simple 10-dma. There is still a chance that SYK will rebound toward the $46 level. We would not suggest new bearish positions here. Wait for a failed rally to occur before considering new entries. The Point & Figure chart points to a $23.00 target. Our target is the $40.25-40.00 range, near its October lows. We do not want to hold over the January earnings report. That gives us about three weeks, maybe less.

Picked on December 30 at $ 44.29
Change since picked: + 1.08
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 2.1 million
 

Strangle Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

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Amer. Eagle Out. - AEOS - cls: 22.80 chg: -0.51 stop: n/a

AEOS reported same-store sales growth of +9.8% for December. The news elicited a small rally that eventually failed but the sell-off saw a late day rebound. Volume came in very high at almost three times the daily average. Shares of AEOS remain under their trendline of resistance. We see no change from our weekend update on AEOS. We only have three weeks left before January options expire. We're not suggesting new plays. The current strangle has an estimated cost of $2.35 with the January $27.50 calls (AQU-AY) and the January $22.50 puts (AQU-MX). We are targeting a rise to $4.70.

Picked on November 13 at $ 25.47
Change since picked: - 2.67
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 65.00 chg: -0.72 stop: n/a

ANF was weak most of the session with a decline to its simple 21-dma near the $64 level. Volume came in above average. We see no change from our weekend update. We are adjusting our target to breakeven at $5.15. We are not suggesting new strangle positions at this time. The options in our strangle are the January $65 calls (ANF-AM) and the January $55 puts (ANF-MK). Our estimated cost was $5.15.

Picked on November 13 at $ 59.67
Change since picked: + 5.33
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 39.99 chg: -0.14 stop: n/a

A failure to produce any sort of oversold bounce today does not bode well for the bulls. Contributing to the lackluster session was an analyst reiterating their "hold" rating (a.k.a. "don't buy" rating). We do not see any change from yesterday's update. More conservative traders may want to exit early right here to reduce their losses. We only have three weeks left before January options expire. We're adjusting our target to breakeven at $3.25. Our current play involves the January $50 call and the January $40 put. Our estimated cost is $3.25.

Picked on December 04 at $ 45.43
Change since picked: - 5.44
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 73.44 chg: +0.65 stop: n/a

BMHC is still trying to bounce but it's struggling with the $75 level. We are not suggesting new strangle positions at this time. The options in our strangle play are the March $90 calls (BGU-CR) and the March $70 puts (BGU-ON). Our estimated cost is $8.20. Our target is $12.50 by March expiration.

Picked on December 18 at $ 80.95
Change since picked: - 7.51
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 357.80 chg: -5.23 stop: n/a

There is little change from yesterday. CME continues to show relative weakness. There are only three weeks left before January options expire. We are adjusting our target to breakeven at $26.70. That means CME needs to trade well above $400 or under $350 if we're going to hit our new target. We are not suggesting new positions. Our current play involves the January $400 calls (CMJ-AK) and the January $350 puts (CMJ-MA). Our estimated cost was $26.70.

Picked on November 20 at $375.90
Change since picked: -18.10
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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Four Seasons - FS - close: 52.34 chg: +0.57 stop: n/a

FS is still bouncing. Today's gain would confirm yesterday's breakout over the 50-dma. We have less than three full weeks before January options expire. FS needs to trade under $47.50 if we have a chance of recouping our expenses here. The options in our strangle were the January $60 calls (FS-AL) and the January $50 puts (FS-MJ). Our estimated cost was about $2.60. We are adjusting our target to breakeven at $2.60.

Picked on November 08 at $ 55.37
Change since picked: - 2.98
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 29.73 chg: +1.42 stop: n/a

Today's bullish breakout in LEA is probably the last nail in the coffin for our strangle play. The automakers and the parts suppliers all rallied after the December vehicle sales figures came in bad but not worse than expected. There are only three weeks left before January options expire. For this play to succeed or even breakeven we need to see LEA trade over $35 (not likely) or under $25 (a dwindling prospect). We might be able to recoup the cost of this play by buying calls on LEA if the stock can breakout over the $29.00 level. We are no longer suggesting new strangle positions. The options in our strangle are the January $35 calls (LEA-AG) and the January $25 puts (LEA-ME). Our estimated cost was $1.60. We are lowering our target to $1.60.

Picked on November 06 at $ 30.24
Change since picked: - 0.51
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Verifone Holdings - PAY - cls: 25.90 chg: +0.32 stop: n/a

We see no change from our weekend update on PAY. Our cost for the January strangle was about $2.60. Currently the PAY-AX Jan. $22.50 calls are trading at $3.30bid/$3.70 ask. Our target is for a rise to $4.50. We only have three weeks left before January options expire.

Picked on October 12 at $ 19.98
Change since picked: + 5.92
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Questar Corp. - STR - close: 79.46 chg: +0.83 stop: n/a

STR continued to rally with the energy sector even though natural gas futures took a 4% loss today. Shares of STR are now poised to breakout over the $80 level. We only have three weeks left before January options expire and to see this play even breakeven we'd need to see a rally towards $85 or a decline towards $65. We are adjusting our target to breakeven. Our strangle involves the January $80 calls (STR-AP) and the January $70 puts (STR-MN). Our estimated cost was $5.10.

Picked on November 20 at $ 76.25
Change since picked: + 3.21
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 51.03 chg: +1.37 stop: n/a

We are still in a wait and see mode with TXI. The company is due to report earnings on Thursday, January 5th. The earnings report is pretty much our only chance to try and score (and/or breakeven) with this strangle play. If the news fails to jolt TXI out of its three-month trading range then our strangle is in deep trouble. We are not suggesting new plays but aggressive traders might consider a new position using February strikes. The options in our strangle are the January $55 calls (TXI-AK) and the January $45 puts (TXI-MI). Our estimated cost is $2.70.

Picked on November 27 at $ 49.57
Change since picked: + 1.46
Earnings Date 01/05/06 (confirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 54.91 chg: +0.55 stop: n/a

VLO is still rebounding and looks poised to breakout over resistance near $55.75. January options are set to expire in three weeks. If this play is going to score we need to see VLO trade well over $55 or under $45 before expiration. Our target is set to breakeven at $2.93.

Picked on November 21 at $ 50.50
Change since picked: + 4.41
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Dropped Calls

None
 

Dropped Puts

PACCAR Inc. - PCAR - close: 71.55 change: +1.20 stop: 72.51

Danger! PCAR is on the verge of a bullish breakout. The U.S. carmakers released their December sales figures today. While the numbers were terrible the markets seemed to breathe a sigh of relief that they figures weren't worse than expected. This powered a bounce in Ford, General Motors and many of the parts manufacturers. Shares of PCAR added 1.7% and on above average volume. The technical picture is turning more bullish for PCAR. The rally did stall at the $72 level but odds look strong for some follow through tomorrow. We want to exit early and cut our losses here.

Picked on December 20 at $ 69.49
Change since picked: + 2.06
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 838 thousand
 

Dropped Strangles

None
 

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